Industry Analysis & Industry Trends
Reinsurance is the business of insuring insurance policies so that direct insurers can manage their risk and limit their liabilities. Reinsurers often also use reinsurance to manage their own policy risks or to generate profit by insuring reinsured policies. This process is known as retrocession. Reinsurance is a global business because geographical risks can be minimised by spreading coverage across a variety of markets. Operators in this industry generate their revenue from policy premiums and investment income. Industry revenue is estimated to grow at a compound annual rate of 1.7% over the five years through 2016-17. Premium income was weak at the start of the period but rebounded over the following years... purchase to read more
Industry Report - Industry Products Chapter
The Reinsurance industry generates revenue from its core activity of reinsurance and investment returns generated from investments. Some reinsurers also directly write life, health, medical and property and casualty insurance, but IBISWorld estimates that direct sales of insurance policies account for less than 5% of industry revenue.
Like primary insurers, reinsurers derive a portion of their revenue from investment activities. Using their capital and the premium revenue they generate, insurance companies invest in a variety of asset classes to supplement any underwriting losses that may occur. They often choose government and corporate bonds. However, no official revenue figures are recorded for this product segment.
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